The lockdown hit the footwear manufacturing industry quite hard, which – in a survey conducted by Confindustria Moda – claims to have experienced a drop in revenue equal to -38.4% with an overall loss estimated at 1.7 billion euros during the first quarter in 2020. “Our segment, which was unable to reconvert some production lines, like the textile industry did, recorded more significant losses in revenue and orders than other companies in the fashion industry – confirmed Siro Badon, President of Assocalzaturifici. We need strong and structured measures by the government in terms of credit, taxes and support to exports. These are the strategic resources that the businesses of one of the most critical sectors for Made in Italy ask of us”.

Siro Badon

At the moment of the reopening, we wanted to present a picture of the current state of affairs in the main Italian footwear manufacturing districts and take stock of the current situation. From this inquiry emerged a sector that is still strongly characterised by difficulties.
Our survey begins in the Veneto area, where three extremely different districts are active: Veronese, Montebelluna, and Riviera del Brenta. 

Giorgio De Gara

 “With regards to the re-start in March, there are drops between 25-30% when compared to the same period last year. Footwear manufacturers are facing two problems: the negative outcome of the summer season, with undelivered goods, or requests for significant discounts and warehouse stock… The other problem is the unfinished ad campaign for winter, with forecasts that point towards a strong downtrend”, confirms Giorgio De Gara, President of the Confindustria Verona fashion section, who explains the pessimistic outlook characterising companies, in light of the current state of affairs in Italy and the end markets that continue to be closed because of the pandemic. He adds: “One opportunity created by the virus, considering the current uncertainty that makes it difficult for retail to make plans in the long-term, is the possibility to take a
dvantage of the confusion that will push retailers towards just-in-time re-stockings, with their trust accordingly placed in those who know how to react quickly to their demands, thus encouraging business on a national level, which might allow us to recover a few percentage points”. De Gara also criticizes the measures undertaken by the Government to help businesses: “Many declarations were made, but very few of them were carried out. One example is temporary unemployment compensation: only one out of ten companies was able to pay it in advance to employees, with those who did not receive it ahead of time still waiting on this money. Next, is access to bank credit, which is made difficult by excessive bureaucracy. Although state non-refundable grants would be ideal, it would be too easy for it to spiral out of control: it would assist businesses that live off tax breaks, more than those that are geared towards business. The best policy would accordingly be that of tax exemptions,
 which would immediately provide some relief to the most virtuous companies, which have always paid their taxes”.

Alberto Zanatta

The district of Montebelluna, with a calling for athletic footwear, is doing much better, but still must face the problems associated with limited mobility: “The companies of the district – declares Alberto Zanatta, President of the fashion, sports, and footwear group of Assindustria Veneto Centro Treviso-Padova – need to have their technical personnel travel to the outsourced production sites, which during the pandemic worked on and off, to preside over quality control”. Among the themes that emerged during the meeting with the district’s colleagues was that of cash flow: “With the stores closed, and a lack of sales over the last few months, it’s impossible to honour debts with suppliers. We must find a way to maintain relations with them to avoid destroying the territory and economy that supports the sector in an important way”. At the same time, the pandemic also offered opportunities: “We witnessed an incredible acceleration of digitalisation. This is not a lot
of help to the brick & mortar, but for those who produce it is an excellent resource. Additionally, at the end of the lockdown, people would like to go out and do things, so we predict that many of them, in order to guarantee social distancing, will choose to vacation in the mountains, as opposed to the seaside, and for those who produce athletic and technical footwear this is good news”. There are instead criticisms regarding the actions undertaken by the Government during this moment of crisis: “What has the Government done? Some initiatives are interesting, but making everyone happy with mass interventions, is not the right move. Fewer initiatives of greater quality are what is needed. And then Italian bureaucracy is discouraging. Just look at the USA: they have issued only three executive orders, have granted money to businesses, and then made sure the money was well spent. This is what should be done. Instead, with the usual Italian way of doing things, we will not get far”. 

The fabric of Riviera del Brenta, strongly characterised by the presence of luxury subcontractors, seems to be in less difficulty compared to those who produce with their own brands in the same area. “The situation is critical – confides Franco Ballin, councillor of Acrib. Many of our companies have experienced terrible losses in terms of orders and cancellations. Subcontractors have suffered less, but they too have experienced losses. The problem, however, is not so much phase two, but what will happen afterwards: what financial resources will we have access to? And just how difficult will it be to source goods for the coming season? Acrib is preparing economic-financial solutions to recover resources in the months to come and face phase three in the best way possible.”

Giovanna Ceolin

Similar problems are shared by the Alto Milanese area (we passed through Lombardy), where production is done for designer labels like Louboutin, Hermès and Chanel: “Even designer labels have experienced a drop in orders, though to a lesser degree – explains Giovanna Ceolin, President of the Confindustria Alto Milanese fashion group – but they have the resilience to face it financially speaking. More difficult, instead, is the situation of subcontractors: some will be left behind, also because I do not believe we will witness a mad rush towards luxury in the months to come… Those working with their own brand have met up with fewer orders and order cancellations. The summer season is ending, but no one has yet started on the winter. We hope there will be signs of life further down the line: from our end, we are negotiating with the unions about the possibility of working in August”.
“In any case – adds Giovanna Ceolin – our district is working and has succeeded in keeping the entire chain alive. If we were to lose it, we would lose credibility on an important value like that of Made in Italy, which by tradition is manufacturing-related. We must do our absolute best to ensure this culture does not evaporate into thin air”. 

Giacomo Fioravanti

Also in the Florentine area (passing though Tuscany), Giacomo Fioravanti, President of the Florence footwear manufacturing section and owner of F.lli Borgioli, speaks of a similar situation: “For designer labels, with the exception of a few adjustments, the orders were confirmed and production is proceeding regularly for now. What changes is the season: many labels, including those I personally work with, will not present their collections in June, but rather in September. Many will present them in a reduced format, making do with leftover inventory. For those who have their own brands the situation is tragic: already before Covid, the situation in Italy and Europe was not great. The January and February fairs were not the best: those who were expecting orders to be reconfirmed instead saw them cancelled, while those who already had orders were forced to put them on standby. Traditionally, the Italian market moves around representatives and the period of Easter, but this year it wa
s all blocked. Thus, for those who delivered their summer collections, let’s pray that they get paid, while others still have these collections in their warehouses. Additionally, no one is even thinking about viewing winter collections right now: they will wait until October/November for just-on-time orders”. What measures does Fioravanti believe the Government should take to help businesses? “The Government should subsidise state non-refundable grants and think about declaring a state of emergency, just like in the post-war period. There is a lack of funds and the proposal of Confindustria was to extend the time needed to repay loans from ten to thirty years, as was done with the loans granted by the State, which are not easy to obtain”.

Agostino Apolito, Vice President of Confindustria Firenze, adds that the critical point, above all for small and medium-sized businesses in the district, is the reorganisation of the collections during a moment when seasons no longer seem to exist. Despite all this, the pandemic seems to have also offered new challenges and opportunities: “An absence of physical fairs, which are now exclusively held in a digital format, will be a great experimental test for verifying if these innovative tools really work”, he declares. “Recent times have also favoured creativity and the rethinking of fashion concepts with greater attention to sustainability: themes extremely important to consumers. While designers and leading brands are already tackling this change, other businesses will have to join them as soon as possible”.

Matteo Piervincenzi

With complex economic crises already characterising the footwear and leather goods manufacturing districts of Fermano and Macerata (we are in the Marches), the moment is extremely critical for these areas. “Many companies have goods in stock, orders cancelled, some are unable to get paid and there is the problem of the coming season, which is going to be a huge question market”, declares Matteo Piervincenzi, President of the Confindustria Macerata footwear section. “What is needed – he continues – are state non-refundable grants to start up again and face the changes and the coming sales season, where a number of uncertainties still persist: will there be customers? And the fairs? We must quickly reinvent contact with customers through B2B platforms. Digitalisation is a step that we should have taken some time ago and the Covid-19 emergency only sped up the process”. The Confindustria headquarters is of great support during this critical time: “We are working side-by-si
de with our businesses – explains Carlo Cipriani, head of internationalisation – with web communications and the activation of B2B platforms, with training for the activation of cleaning protocols, and with specific measures dedicated to the supply chain, in order to guarantee the continuity of a district strongly characterised by footwear, accessories, and leather goods”.

Valentino Fenni

In agreement with Matteo Piervincennzi, is his colleague Valentino Fenni, President of the Confindustria Fermo footwear section: “The Coronavirus medical emergency took root in a territory already in difficulty for the earthquake and general economic crisis. Customers who placed orders did not pick up their goods, or if they did, asked for impossible discounts between 20-30%. After all, it’s understandable if during a time like this, stores do not want to run risks: for example, who would buy a shoe for a formal ceremony, knowing that weddings can only be held in limited numbers? The sales season was blocked halfway through and the world collapsed. The winter represents an unknown and selling on the internet is not so easy. And the situation extends to all of Europe: I don’t know what prospects to imagine for the future. Also for fairs: in what conditions will we be able to hold them and how will we work? It is very probable we will witness a selection of companies and a high level of unemployment”. He finishes up with a plea for action: “The supply chain is all connected: what happens to us happens to the entire chain. The time has come to do something for those of us who work, produce, and provide jobs in Italy: is it possible that we are unable to send this message? The institutions should clearly promote buy Made in Italy or buy Made in Europe”.

Lucio Nucci

Lucio Nucci, President of the Confindustria Bari footwear section, also laments the fact that for businesses in the Bari area the SS 20 season has been completely compromised, while the FW 20/21 season has been seriously damaged. “It seems obvious and a given, – he declares – but companies in our sector need immediate cash flow to guarantee their continuity as businesses and a complete suspension of payment for taxes, along with welfare mechanisms implemented for Covid-19. Confindustria immediately enacted a campaign of awareness with the government in this regard, asking at the same time for reactivity and concrete solutions”.
During this critical moment, digitalisation also offers an opportunity to businesses from this territory: “many operators, those who are more farsighted and structured, were already firmly entrenched in the digital world with advertising through social networks and online sales, while others spontaneously started using them in reaction to the critical moment”.

Pasquale Della Pia

The Neapolitan district (Campania), with close ties to the great tradition of footwear manufacturing, is divided on two fronts: “Those working for leading labels have started regularly working once again. Maybe employing only 50-70% of the usual personnel to respect the social distancing guidelines set forth by the decrees. Those, instead, working with their own brands are in an extreme position of difficulty – explains Pasquale Della Pia, councillor of the Unione Industriali di Napoli fashion section – I, for example, find myself in a position that is halfway between the two, with 50% of the work dedicated to my own brand and the other 50% subcontracted to other fashion brands. The uncertainties are global: we need to understand the repercussions of the lockdown, while taking into stride the unpredictability of a pandemic, which could re-emerge and force another period of lockdown. Our customers have been closed for three months and are not interested in the winter season… w
e are living day-to-day. Financial problems will continue, but if work were actually available, it could all easily be resolved by asking for loans from the bank. However, this is not the case and work is still at a standstill. Within a year, I expect 20% to 40% of the district’s businesses to close. Without counting the supply chain that risks being completely annihilated”.

Francesco Palandrani

ATEA: the point of view of Abruzzo leather goods manufacturers 

The 55 leather goods and apparel firms from the Atea consortium in Abruzzo share the same problems as the footwear manufacturing industry: difficulty in wrapping up the season, uncertainties for the coming season, and problems of cash flow and insolvency. “What we need to understand is how the pandemic will influence the priorities of consumers. We will have to redefine geographies, consumption, tastes – and become more farsighted – states President Francesco Palandrani – It’s difficult to get a clear handle of the situation. We have an on-going project for the start-up of an online platform on which to present our companies’ products: a project we had previously thought of but had set aside in favour of projects of internationalisation and training. Now, it has become an absolute priority. We are also conducting a survey among our companies to collect data and then submit it to the institutions”.

Giuseppe Marrinozzi

Assoprov: the point of view of representatives 

In the post-lockdown period, many of the customers of Assoprov, large and mid-size chains, worked, though to a lesser degree. However, the initial recovery seems to have been interrupted: “If things continue like this, if we do not regain a minimum amount of trust, it’s impossible to say how it will end – declares Giuseppe Marrinozzi, secretary of Assoprov – I feat that for Fall/Winter there will be a sore lacking of products: customers are scared, also of a possible second wave of Covid-19 in the fall, and so they are not placing orders. If they place them later on, the technical times needed for production will not be sufficient”. Large chains, on average, propose 10% Italian products, with the rest coming from countries like Turkey, India, and China, which are also the markets in which Marrinozzi produces: “The pandemic has sent the markets into a crisis: in China, many producers have remained closed and if they reopen, they will not do so until even September-October;
 in India, the Mumbai area is currently in lockdown; in Turkey, where they continued to work, it is to a lesser degree, also because their market of reference, Russia, has collapsed. Although we have gotten used to smart working, the critical moment of preparing the collections requires an on-site presence, which is currently not possible”.